Question 1

A general fund's budgeted expenditures for the year are called:

Accepted Answer

Appropriations represent the legal authorization granted by a legislative body to incur expenditures and obligations for specific purposes, which is essentially what a general fund's budgeted expenditures for the year are called.

Question 2

A county general fund has $400 in estimated revenues, $5 in estimated other financing sources, $395 in appropriations, and $25 in estimated other financing uses. The beginning-of-year budget entry for the general fund will include a credit to

Accepted Answer

The answer of A county general fund has $400 in...

Question 3

A county general fund has $400 in estimated revenues, $5 in estimated other financing sources, $395 in appropriations, and $25 in estimated other financing uses. The beginning-of-year budget entry for the general fund will include a debit to

Accepted Answer

The beginning-of-year budget entry for the general fund will include a debit to Fund balance-unassigned because the total estimated revenues and other financing sources ($400 + $5 = $405) are less than the total appropriations and other financing uses ($395 + $25 = $420), indicating a need to use $15 from the unassigned fund balance to balance the budget.

Question 4

The general fund has the following budget:
•$400,000 in estimated revenues,
•$410,000 in appropriations,
•$20,000 in estimated other financing sources, and
•$25,000 in estimated other financing uses.
If the general fund's balance in fund balance-unassigned was $60,000 at the beginning of the year, before the budget entry, what is its balance after the budget entry?

Accepted Answer

$60,000 + $400,000 - $410,000 + $20,000 - $25,000 = $45,000

Question 5

The general fund collects taxes that are legally restricted for use in a future year. The amount of the collections is reported on the general fund's:

Accepted Answer

Taxes that are legally restricted for use in a future year are not recognized as revenue in the period they are collected. Instead, they are reported on the balance sheet as a deferred inflow of resources, indicating that the funds have been received but are not yet earned or available for current period expenses.

Question 6

Which one of the following is most likely to be accrued as revenue by the general fund prior to receiving the cash?

Accepted Answer

Property tax revenues are typically accrued as revenue by the general fund prior to receiving the cash because they are levied by governments with an expectation of collection within the fiscal period or shortly thereafter, allowing for accrual accounting recognition.

Question 7

At the start of 2020, a county general fund issues property tax bills in the amount of $9,000,000. It expects to collect $8,800,000 from property owners, with the rest expected to be uncollectible. During the year, $8,750,000 in 2020 property taxes is collected. Of the remaining $250,000 in uncollected taxes at year-end, it is estimated that $100,000 will be collected within 60 days and the rest are uncollectible. Property tax revenue for 2020 is:

Accepted Answer

$8,750,000 + $100,000 = $8,850,000

Question 8

Use the following information to answer bellow Questions.
At the beginning of 2020, the balance sheet of a county general fund reports $500,000 in property taxes receivable from 2019, of which $350,000 are considered uncollectible. During 2020 the county sends out tax bills in the amount of $10,000,000, of which $600,000 are expected to be uncollectible. Cash collections on 2019 taxes are $140,000, and the remaining uncollected taxes are written off. Cash collections on 2020 taxes are $9,500,000. Of the $500,000 uncollected at the end of 2020, $100,000 are expected to be collected within 60 days, $65,000 are expected to be collected more than 60 days after year-end, and the rest are uncollectible.
-How does activity in 2020 related to 2019 taxes affect 2020 property tax revenue?

Accepted Answer

Expected revenues already accrued in 2019 were $150,000 (= $500,000 - $350,000). Actual collections in 2020 were $140,000. Therefore, 2020 property tax revenue is reduced by $10,000 (= $150,000 - $140,000).

Question 9

Use the following information to answer bellow Questions.
At the beginning of 2020, the balance sheet of a county general fund reports $500,000 in property taxes receivable from 2019, of which $350,000 are considered uncollectible. During 2020 the county sends out tax bills in the amount of $10,000,000, of which $600,000 are expected to be uncollectible. Cash collections on 2019 taxes are $140,000, and the remaining uncollected taxes are written off. Cash collections on 2020 taxes are $9,500,000. Of the $500,000 uncollected at the end of 2020, $100,000 are expected to be collected within 60 days, $65,000 are expected to be collected more than 60 days after year-end, and the rest are uncollectible.
-What are total property tax revenues for 2020, related to 2020 tax bills?

Accepted Answer

11ee52c7_4d09_798b_90ce_7764974c2ad0_TBCB1002_00

Question 10

Use the following information to answer bellow Questions.
At the beginning of 2020, the balance sheet of a county general fund reports $500,000 in property taxes receivable from 2019, of which $350,000 are considered uncollectible. During 2020 the county sends out tax bills in the amount of $10,000,000, of which $600,000 are expected to be uncollectible. Cash collections on 2019 taxes are $140,000, and the remaining uncollected taxes are written off. Cash collections on 2020 taxes are $9,500,000. Of the $500,000 uncollected at the end of 2020, $100,000 are expected to be collected within 60 days, $65,000 are expected to be collected more than 60 days after year-end, and the rest are uncollectible.
-The general fund's balance sheet at the end of 2020 will include:

Accepted Answer

11ee52c7_4d09_a09c_90ce_cf91841b036f_TBCB1002_00 Therefore, property taxes receivable = $10,000,000 - $9,500,000 = $500,000; the allowance for uncollectible taxes = $600,000 - $265,000 = $335,000; and deferred tax inflows are $65,000.

Question 11

Use the following information to answer bellow Questions.
On January 1, 2020, a county government sends out property tax bills in the amount of $100,000,000. Of this amount, $15,000,000 is estimated to be uncollectible. During the year, $88,000,000 is collected. Of the $12,000,000 in uncollected taxes at December 31, 2020, $3,000,000 is expected to be collected within the next 60 days, and $1,800,000 is expected to be collected after 60 days. The rest are estimated to be uncollectible. In 2021, $10,000,000 is collected related to 2020 tax bills, and the remaining uncollected 2020 taxes are written off.
-What is the balance in the allowance for uncollectible taxes on the December 31, 2020 general fund balance sheet?

Accepted Answer

Uncollected taxes at year-end = $100,000,000 - $88,000,000 = $12,000,000
Uncollectible amount = ($12,000,000 - $3,000,000 - $1,800,000) = $7,200,000

Question 12

Use the following information to answer bellow Questions.
On January 1, 2020, a county government sends out property tax bills in the amount of $100,000,000. Of this amount, $15,000,000 is estimated to be uncollectible. During the year, $88,000,000 is collected. Of the $12,000,000 in uncollected taxes at December 31, 2020, $3,000,000 is expected to be collected within the next 60 days, and $1,800,000 is expected to be collected after 60 days. The rest are estimated to be uncollectible. In 2021, $10,000,000 is collected related to 2020 tax bills, and the remaining uncollected 2020 taxes are written off.
-What is the balance for property tax revenues, as reported on the general fund operating statement for 2020?

Accepted Answer

11ee52c7_4d09_c7ad_90ce_edd6b448037a_TBCB1002_00 $85,000,000 + $6,000,000 = $91,000,000
Or, cash collected plus cash expected to be collected within 60 days = $88,000,000 + $3,000,000 = $91,000,000.

Question 13

Use the following information to answer bellow Questions.
On January 1, 2020, a county government sends out property tax bills in the amount of $100,000,000. Of this amount, $15,000,000 is estimated to be uncollectible. During the year, $88,000,000 is collected. Of the $12,000,000 in uncollected taxes at December 31, 2020, $3,000,000 is expected to be collected within the next 60 days, and $1,800,000 is expected to be collected after 60 days. The rest are estimated to be uncollectible. In 2021, $10,000,000 is collected related to 2020 tax bills, and the remaining uncollected 2020 taxes are written off.
-How much property tax revenue, related to 2020 tax bills, is reported in 2021?

Accepted Answer

11ee52c7_4d09_c7ae_90ce_dd5e5ebe0728_TBCB1002_00 $1,800,000 + $5,200,000 = $7,000,000.
Or, 2020 unpaid taxes reported as revenues in 2020 = $3,000,000. Actual amounts collected = $10,000,000. $10,000,000 - $3,000,000 = $7,000,000 tax revenues recognized in 2021.

Question 14

A government orders services in the amount of $5,000,000 and records the order as an encumbrance. When the services are provided, the invoice is in the amount of $4,998,000. Which statement below is true?

Accepted Answer

The answer of A government orders services in the amount...

Question 15

A general fund uses the consumption method to record inventories. Beginning inventories are $10,000, purchases are $600,000, and ending inventories are $12,000. The general fund will report inventory expenditures of:

Accepted Answer

Inventories used = $10,000 + $600,000 - $12,000 = $598,000

Question 16

A general fund uses the consumption method to record inventories. Beginning inventories are $10,000, purchases are $600,000, and ending inventories are $12,000. The general fund records an end-of-year adjusting entry that:

Accepted Answer

The increase in inventory ($12,000 ending - $10,000 beginning = $2,000) requires a debit to unassigned fund balance to reflect the increase in nonspendable resources.

Question 17

Use the following information to answer bellow questions 
A county's general fund has $4,000,000 in supplies on hand at the start of 2020. It purchases $25,000,000 in supplies and uses supplies costing $26,000,000 during 2020.
-If the county uses the consumption method to report supplies inventories, what balances appear in the general fund financial statements for 2020?

Accepted Answer

Supplies on hand at the end of 2020 = $3,000,000
Expenditures = supplies used = $26,000,000

Question 18

Use the following information to answer bellow questions 
A county's general fund has $4,000,000 in supplies on hand at the start of 2020. It purchases $25,000,000 in supplies and uses supplies costing $26,000,000 during 2020.
-If the county uses the purchases method to report supplies inventories, what balances appear in the general fund financial statements for 2020? Assume the supplies inventories are not material.

Accepted Answer

The purchases method reports no supplies inventories on the balance sheet unless they are material.
Expenditures = supplies purchased = $25,000,000

Question 19

Use the following information to answer bellow questions 
A county's general fund has $4,000,000 in supplies on hand at the start of 2020. It purchases $25,000,000 in supplies and uses supplies costing $26,000,000 during 2020.
-If the consumption method is used, what adjusting entry is required at year-end?

Accepted Answer

The answer of Use the following information to answer bellow...

Question 20

A general fund makes payments to the debt service fund, as follows:
•$4,000,000, as legally authorized in the budget, for payment of principal due on general obligation debt
•$2,000,000, as legally authorized in the budget, for payment of interest due on general obligation debt
•$500,000 temporary transfer, to be paid back when the debt service fund receives funding from other sources
The above transactions reduce the general fund's fund balance-unassigned by what amount?

Accepted Answer

The legally authorized transfers are other financing uses, deducted from fund balance:
$4,000,000 + $2,000,000 = $6,000,000
The temporary transfer is a receivable and does not affect fund balance.

Quiz 10: State and Local Governments: Introduction and General Fund Transactions